NEW DELHI: Bharti Airtel’s acquisition of Telenor India may hit roadblocks, with the Norwegian company’s local unit considering filing for bankruptcy protection amid mounting daily losses and a tussle over a bank guarantee poised to delay government approval of the deal. The acquisition plan, announced in February 2017, has not closed and is well past the 12-month closure timeline expected by the two companies.

The Department of Telecommunications (DoT) is likely to move the Supreme Court this week against a telecom tribunal order that told the government to clear the deal without having Bharti Airtel submit a bank guarantee for about Rs 1,700 crore, people familiar with the matter said.

Amid the wrangling between Airtel and DoT, Telenor India is racking up losses of Rs 4 crore daily from operations in six circles, adding to its present debt of almost Rs 6,000 crore, a person aware of the matter at the company said. The company’s financial situation and the delay in approval of the deal are “pushing” Telenor India to consider filing for bankruptcy under the Insolvency and Bankruptcy Code, the person said, adding that the matter has been conveyed to DoT officials over the past couple of weeks.

“They’re facing financial losses every day… if they file for bankruptcy, the (Airtel) deal could face trouble,” the person said, asking not to be identified. Experts said once a bankruptcy petition is admitted by the National Company Law Tribunal, the company will be run by a resolution professional. “Then all powers are with the resolution professional to take the option that it deems as fair to financial and operational creditors,” said Manoj Kumar, partner and head of M&A transactions at Corporate Professionals.

“If the IRP (interim resolution professional) believes that the Airtel deal itself is the best option, it may go with that and recommend that to the committee of creditors. Or, if it feels the Airtel deal won’t be fair to lenders, then it can call for a bidding as well.” The law doesn’t make bidding mandatory and also allows private arrangements. At stake also are Telenor’s investments worth Rs 24,000-25,000 crore in its local operations over the years and almost 900 employees.

Telenor India and Bharti Airtel did not respond to ET’s queries as of Monday press time. Airtel plans to buy Telenor India in a no-cash deal and take over its outstanding spectrum payments of Rs 1,650 crore. The deal will help Airtel narrow the revenue market share gap with Vodafone India-Idea Cellular combine, which will become No. 1 after their merger.

Airtel will also get Telenor’s 4G airwaves in Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam, besides operational contracts, tower leases and about 40 million subscribers as of January. Telenor hasn’t started services in Assam.

The Competition Commission of India, Sebi, the stock exchanges and NCLT have already approved the acquisition and only DoT has to endorse it. The DoT is bent on getting a bank guarantee from Airtel equal to Rs 1,499 crore for one-time charges for airwaves allocated to the telco and over Rs 200 crore for spectrum payment owed by Telenor before approving the deal.

“The plan is to move SC within this week” to challenge the telecom tribunal’s April 12 order mandating DoT to approve the Airtel-Telenor merger without the bank guarantee, a department official said, adding that the government’s demand is backed by M&A rules.